Overview of India's Critical Mineral Strategy
India is aggressively pursuing a strategy to secure critical minerals essential for various modern industries, such as electric vehicles, renewable energy, electronics, and defense. Despite having substantial deposits, India faces numerous challenges in achieving self-reliance in this sector. The country has launched a National Critical Minerals Mission and auctioned 34 mines so far.
Challenges in the Path to Self-Reliance
- Surprisingly aggressive bidding for shallow exploration blocks raises concerns about their viability.
- Need for boosting processing facilities and expediting production timelines.
Global Context and Strategic Importance
China's restriction on rare earth exports highlights the geopolitical vulnerabilities and the need for countries like India to build self-sufficiency in critical minerals. India has initiated measures like accelerating auctions and deeper exploration efforts to mitigate these risks.
Geological Survey and Resource Estimations
- India has identified significant reserves, including:
- 310 million tonnes of rare earth elements
- 73 million tonnes of graphite
- 12.3 million tonnes of lithium
- Auctions span over a dozen states and cover a variety of deposits like tungsten, vanadium, and others.
Policy Adjustments and Auction Strategies
The government is no longer capping bid premiums and is planning advanced exploration before auctions to enhance investor confidence. The Ministry of Mines has amended the Mineral (Auction) Rules, 2015, to introduce clear timelines and accountability mechanisms.
Lifecycle of Critical Minerals
- The journey involves stages like exploration, auctioning, mine development, and processing.
- Exploration progresses through levels from G4 to G1, establishing mineral deposit confidence.
- India has auctioned 77 new blocks, mainly at low exploration levels, which may not meet major firms' expectations.
Auction Challenges and Industry Feedback
- Limited exploration data at G3 or G4 levels raises concerns over commercial viability.
- Despite limitations, aggressive bidding is observed, with high bid premiums for some blocks.
Processing Capacity and Technological Gaps
- India lacks sufficient processing capacity for refining minerals, leading to import dependency.
- Technological capabilities for discovering deep-seated deposits are limited.
Long-term Development and Policy Amendments
Converting auctioned blocks to operational mines is a lengthy process, and recent amendments aim to expedite this by setting intermediary timelines and penalties for delays. However, experts agree that auctions alone cannot drive India's critical minerals sector forward.
